Forex Market: USD/CAD daily trading outlook

Written by Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

Yesterday’s trade saw USD/CAD within the range of 1.2967-1.3108. The pair closed at 1.3026, edging down 0.36% compared to Mondays close. It has been the 128th drop in the past 282 trading days. The major pair has trimmed its slump to 0.68% so far in June, following a 4.31% surge in the prior month.

At 7:39 GMT today USD/CAD was edging down 0.13% on the day to trade at 1.3009. The pair touched a daily high at 1.3043 during the early phase of the Asian trading session, overshooting the daily R1 level, and a daily low at 1.3005 during early European trade.

Meanwhile, crude oil futures rebounded from 1.5-month lows to mark their 73rd gain out of the past 137 trading days on June 28th. Oil for August delivery went up as high as $48.35 per barrel, or its highest price level since June 24th, and closed at $47.85, surging 3.28% compared to Monday’s close. As of 7:51 GMT today the commodity was gaining 1.27% to trade at $48.46, after going up as high as $48.51 per barrel earlier.

On Wednesday USD/CAD trading may be influenced by the following macroeconomic reports as listed below.

Fundamentals

United States

Personal Income, Personal Spending

Personal spending in the United States probably rose 0.4% in May, according to market expectations, while personal income was probably up for a 14th consecutive month in May, increasing at a monthly rate of 0.3%.

Consumer spending, which accounts for over two thirds of the nations GDP, rose 1.0% in April, or at the fastest monthly rate since August 2009. At the same time, personal income increased 0.4% in April, or matching the gain rate in March, which implied a robust recovery.

Wages and salaries were up USD 38.6 billion in April, following an increase by USD 30.7 billion in the preceding month, while supplements to wages and salaries rose USD 5.9 billion in April, after going up USD 5.5 billion in March. Private sector wages and salaries went up USD 37.2 billion in April, after an increase by USD 27.6 billion a month ago, while government wages and salaries rose USD 1.4 billion, after going up by USD 3.1 billion in March.

Higher-than-expected rates of increase imply good employment conditions and, therefore, are dollar positive. The Bureau of Economic Analysis is to publish the official figures at 12:30 GMT.

Pending Home Sales

The index of pending home sales in the United States probably fell 1.1% in May from a month ago, according to the median estimate by experts. In April pending home sales increased 5.1%, or the most since May 2014, when sales surged at a revised down monthly rate of 6.0%.

In annual terms, the index of pending home sales advanced 4.6% in April, which has been a 20th consecutive period of increase. In addition, Aprils rate of sales growth has been the fastest since August 2015.

In case pending home sales decreased at a faster pace than anticipated in May, this would have a moderate bearish effect on the US dollar. The National Association of Realtor’s (NAR) will report on the official index performance at 14:00 GMT.

Bond Yield Spread

The yield on Canada’s 2-year government bonds went as high as 0.518% on June 28th, after which it closed at 0.496% to lose 0.008 percentage point compared to June 27th.

Meanwhile, the yield on US 2-year government bonds climbed as high as 0.633% on June 28th, or the highest level since June 24th (0.755%), after which it fell to 0.617% at the close to add 2 basis points (0.02 percentage point) compared to June 27th.

The spread between 2-year US and 2-year Canadian bond yields, which reflects the flow of funds in a short term, rose to 0.121% on June 28th from 0.109% on June 27th. The June 28th yield spread has been the largest one since June 23rd, when the difference was 0.159%.